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10 years in, Tennessee lottery on a roll

Ten years after it debuted, the Tennessee Education Lottery has sold more than $11 billion worth of tickets, given out more than $2.2 billion in college scholarships and made some retailers pretty happy.

Ten years after it debuted, the Tennessee Education Lottery has sold more than $11 billion worth of tickets, given out more than $2.2 billion in college scholarships and made some retailers pretty happy.

"It's been doing great since we sold that ticket," said T.K. Kabaria, manager of the Shell station on Old Harding Pike that recently sold a $61 million Mega Millions winner. "People think this is a lucky store and all that."

The lottery started on Jan. 20, 2004, more than a year after almost 58 percent of voters supported its creation in a statewide referendum. Sales have steadily increased, topping $1.36 billion in the most recent full fiscal year, which ended June 30, 2013. They're on pace to exceed $1.38 billion in the current year.

"Everybody's embraced it," said U.S. Rep. Steve Cohen, a Memphis Democrat who started championing the idea of a lottery as a state senator in 1984. "It's been tremendously successful, exactly as we predicted it would be."

For Cohen, the success even has an all-in-the-family feel of sorts. He said he knew Bettina Still, the retired Bellevue woman who won the jackpot at Kabaria's store, when she worked as a telephone operator for the General Assembly.

Rebecca Hargrove, the lottery's president and CEO since it began, said its profit growth has averaged 5 percent a year, almost twice the industry average since 2004. The amount of money that has gone to education programs, including scholarships, approaches $3 billion.

"It's the first time in the history of the lottery industry that a start-up has grown nine straight years," Hargrove said.

Cohen said the games could have done more, however, for their primary purpose: generating scholarships to help keep Tennessee high school graduates in the state for college. Qualified students can receive up to $2,000 per semester, or $4,000 a year for most students, at public or private four-year schools in the state.

Lawmakers have occasionally found other ways to spend some of the lottery revenue, such as giving education grants to medical students who agree to work in rural areas, buying laptops for high school students in dual-enrollment programs and replacing school fixtures and equipment with more energy-efficient versions.

The state has $385 million in lottery reserves, said Tim Phelps, associate executive director of the Tennessee Student Assistance Corp., which administers the scholarship program.

"That needs to go back into scholarships," Cohen said. "To have kids graduate without debt, we need to give them more money."